Microsoft told more than 1,000 contract workers doing software development and testing to take seven business days off without pay to lower costs during this quarter, the company said Monday.

Earlier this month, Microsoft asked half of the technology vendors it uses for software development to defer seven business days worth of work including this week, to the coming fiscal year starting July 1, said company spokesman Lou Gellos.

The software giant emphasized it was not over-budget, but certain divisions needed to pare back some costs in order to stay on budget. Microsoft said these types of cut-backs are a common way for technology companies to manage costs.

"It is fairly common within the industry, but not that common for Microsoft," said Gellos, who declined to be more specific about what areas of the company were involved except to say that the development was "not critical."

Microsoft shares have fallen 16 percent since the company said earnings would be hurt by increased spending next year. Analysts estimated it will spend $2 billion more in fiscal 2007 than expected. The stock rose 32 cents to $22.88 on Monday.

Microsoft employs more than 63,000 workers worldwide, but it would not comment on the number of contract workers it uses.